When will a transaction affect only one side of the accounting equation? Only one side of the accounting equation will be affected when one asset is used to acquire another asset or to replace another asset, when one...
When will a transaction affect only one side of the accounting equation? Only one side of the accounting equation will be affected when one asset is used to acquire another asset or to replace another asset, when one...
refers to: organizations that are not government owned, and the goods and services provided by organizations outside of the government Example of Private Sector Companies owned by individuals are part of the private...
What is the dividend payout ratio? The dividend payout ratio, or simply the payout ratio, is the percentage of a corporation’s earnings that is paid out in the form of cash dividends. The calculation of the dividend...
Our Explanation of Accounting Basics uses a simple story to introduce important accounting concepts and terminology. It illustrates how transactions will be included in a company's financial statements.
earnings, treasury stock, and accumulated other comprehensive income. Examples of Negative Amounts in the Equity Section If the current year’s net income is reported as a separate line in the owner’s equity or...
that an asset is acquired. Further, the amount recorded will not be increased for inflation or improvements in market value. (An exception is the change in market value of a short-term investment in the capital stock of...
to make meaningful comparisons between years. Consistency does allow a company to make a change to a more preferred accounting method. However, the change and its effects must be clearly disclosed for the benefit of the...
is to develop an average for the year that considers every month’s inventory. This is preferred over an annual average that is based on just two points: (the amount of inventory at December 31, 2022 plus the inventory...
The estimated number of days between ordering and receiving the units being ordered The number of units of safety stock The reorder point indicates when to place an order. The economic order quantity indicates the...
, to reduce rent, etc. To satisfy stockholders who prefer appreciation in the value of the corporation’s common stock instead of receiving cash dividends that require current income tax payments Join PRO to Track...
What is Form 10-K? Definition of Form 10-K Form 10-K is a required annual report filed with the U.S. Securities and Exchange Commission (SEC) by U.S. corporations whose common stock is publicly traded. It is common for a...
Our Explanation of Financial Statements provides you with the highlights of each of the five external financial statements issued by U.S. corporations. Our insights will give you a good understanding of what the...
share on the face of the income statement. 27. Earnings per share refers to which type of capital stock? Select... Common Preferred View Coaching Earnings per share (EPS) refers to the earnings per share of common...
A structured market for trading stocks and bonds such as the New York Stock Exchange or NASDAQ. Capital market can also include less structured markets such as private placements.
The date on which the board of directors of a corporation declares a dividend on the corporation’s stock. On this date an accounting entry is made to debit Retained Earnings and to credit Dividends Payable.
A corporation with a limited number of stockholders and whose stock is usually not publicly traded.
The amount paid or contributed by stockholders in exchange for shares of a corporation’s stock.
Generally, securities that can be sold quickly in the stock or bond market and where the investor’s intention is to sell them within one year of the balance sheet date.
An owner’s or stockholders’ equity account with a debit balance instead of the normal credit balance. Examples include the owner’s drawing account, a dividend account, and the treasury stock account.
A document filed when a corporation is formed. Among other things, it lists the number of shares of stock that the corporation is authorized to issue.
A written opinion of an independent certified public accountant that a company’s financial statements are a fair representation of the company’s financial performance and financial position. The...
The amount received from the sale of an asset, from the issuance of bonds or stock, or from a bank loan.
In securities, a party that assists a company in issuing stock or bonds.
A legal entity organized under state laws that is considered separate from its owners. Ownership is evidenced by shares of stock.
The amount of free cash flow divided by the weighted average number of common shares of stock outstanding during the year.
Our Explanation of the Balance Sheet provides you with a basic understanding of a corporation's balance sheet (or statement of financial position). You will gain insights regarding the assets, liabilities, and...
), and industry-specific requirements. U.S. corporations whose stock is publicly-traded are also required to file financial reports to the U.S. Securities and Exchange Commission (SEC). Generally, US GAAP requires that a...
An assumption that determines the order in which costs should flow out of a balance sheet account (e.g. Inventory, Investments, Treasury Stock) when the item is sold. For an illustration of the cost flow assumption, see...
An organization established by the U.S.’s Sarbanes-Oxley Act to oversee the auditors of corporations whose stock is publicly-traded. The PCAOB’s board members are appointed by the Securities and Exchange...
of a corporation’s earnings to its cash flows from __________ activities is often used to assess the quality of earnings. Select... financing investing operating 3. A highly profitable corporation with $30 million in...
flows, the cash from operating activities begins with the company’s net income and is then adjusted for depreciation expense and the changes in the current assets and current liabilities. Mark as wrong Mark as right...
, the amount of interest paid, and significant noncash investing and financing activities (such as issuing common stock in exchange for land) The statement of cash flows is important because investors, lenders, financial...
accounts such as the owner’s drawing account and Treasury Stock. (The debit balance in the drawing account will be closed to the owner’s capital account thereby reducing the respective balance at the end of each...
expenses and losses from the company’s revenues and gains. Corporations with shares of common stock that are publicly traded often refer to net income as earnings and their income statements must include the earnings...
Why is there a large difference between share value and stockholders' equity? There can be many reasons why the market value of a corporation’s stock is much greater than the amount of stockholders’ equity...
will be reported in the investing activities section of the statement of cash flows. PROCEEDS ROPCEESD Unscramble PROCEEDS CEDEOSRP Unscramble 7. A corporation's ___________ on its stock will appear as a deduction...
liability accounts including Notes Payable, Accounts Payable, Accrued Expenses Payable, and Customer Deposits stockholders’ equity accounts such as Common Stock, Retained Earnings, Treasury Stock, and Accumulated...
or maturity amount at a specified date some years in the future. The agreement containing the details of the bonds payable is known as the bond indenture. U. S. corporations issue bonds instead of common stock for...
-operating expenses, and losses from the revenues (both operating revenues and nonoperating revenues and gains). When a corporation’s stock is publicly-traded, the amount of earnings must also be shown on the income...
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